Washington, D.C. — Now that an Illinois judge has eliminated the diversionary issue of the appeal bond in a fraud judgment against Philip Morris, we can again focus on the real issue in this case: the massive fraud the court found Philip Morris committed in deceiving smokers of light cigarettes. Philip Morris' deception continues even now as the company today denied that it has ever marketed light cigarettes as less hazardous than regular cigarettes, despite overwhelming evidence to the contrary. If anyone believed Philip Morris' rhetoric that it has changed and become a responsible corporate citizen, its latest actions show that nothing has changed. The severe penalty imposed on Philip Morris in this case is entirely appropriate in light of the tremendous harm Philip Morris' deceptive actions have caused and the company's complete unwillingness to take responsibility for its actions.

Philip Morris' claims about light cigarettes are contradicted by the findings of the court and a November 2001 report of the National Cancer Institute. The court made three principal findings against Philip Morris. First, it found that Philip Morris for decades has deceptively marketed light cigarettes as reducing smokers' health risks despite knowing from its own research that this was not the case. Second, it found that Philip Morris intentionally designed its light cigarettes to produce less tar when smoked by government testing machines, but not when smoked by actual smokers who changed their smoking habits to maintain nicotine levels. Third, the court found that Philip Morris' Marlboro Lights and Cambridge Lights cigarettes are actually more hazardous than their regular counterparts because of changes in the chemistry of the smoke, and that Philip Morris knew this. The judge concluded, "Philip Morris' motive was evil and the acts showed a reckless disregard for the consumers' rights."

The intervention of 37 state and territorial attorneys general in this case to defend state tobacco settlement payments also underscores the states' failure to keep their promise to use tobacco settlement money for tobacco prevention. Last week, the attorneys general filed a brief arguing that the bond threatened Philip Morris' ability to make settlement payments and stated that one purpose of the settlement payments is "to fund anti-smoking public health and education programs." After the bond was reduced, Philip Morris said it would make the next settlement payment as scheduled tomorrow. Now every one of the 37 attorneys general who signed the brief should get to work and ensure that states live up to their promise and use tobacco settlement money to fund tobacco prevention programs. Tobacco prevention should be more than a convenient rhetorical device that state officials cite to defend the tobacco settlement, then ignore when deciding how to budget the money.

To date, states' use of tobacco settlement proceeds to fund tobacco prevention has been woefully inadequate and declining steadily. The National Conference of State Legislatures reported last year that only four percent of the states' Fiscal 2003 settlement revenue was used to fund tobacco prevention, and that number since has declined as several states have cut or eliminated funding for tobacco prevention. Only four states funded prevention programs in FY2003 at minimum levels recommended by the U.S. Centers for Disease Control and Prevention, which usually requires at most a quarter of annual settlement payments, and more than half the states funded prevention programs at less than half the CDC minimum.

Despite this dreadful record, the brief filed by the state attorneys general repeatedly cited the need to protect funding for tobacco prevention as a key reason for reducing Philip Morris' bond. The brief stated that a Philip Morris failure to pay would "undermine the progress in reducing youth smoking that has been made since the MSA (Master Settlement Agreement) was executed." It also stated, "Settlement payments by the companies have provided the resources for effective State anti-tobacco campaigns, and the reductions in youth smoking have been most dramatic in those States that have used settlement revenues to fund such programs." Having used the funding of tobacco prevention to help justify their actions in this case, every one of the attorney generals who signed this brief should now fight to adequately fund comprehensive tobacco prevention programs in their states.